Nissan Cancels Grand Opening of Taxpayer-Backed EV Plant

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Ghosn photoThe moment that all we electric automotive industry stakeholders (that is, taxpayers) have been waiting for has arrived! The dreams that spurred our $1.4 billion investment in Nissan’s Tennessee plant, for construction of the all-electric Leaf, and its batteries, will finally be realized!

Pass out the scissors for the ribbons, set up the podium for the dignitaries, and roll out a few of those shiny new models…what’s that you say? The ceremony’s been cancelled?

Sure enough, the planned grand opening a couple weeks ago for the Japanese automaker’s factory in Smyrna, Tenn. was called off. It’s not going to be rescheduled. The excuse was that there was a scheduling conflict “among key stakeholders,” which is a surprise considering that with so much taxpayer money behind Nissan’s loan guarantee, “key stakeholders” are plentiful.

But seriously, the horrid-selling Leaf never deterred Nissan from celebrating every milestone – real and imagined – since the car’s introduction nearly three years ago. According to PlugInCars.com, it all looked like a huge build-up to the culmination of what was supposed to be the party of all parties two weeks ago.

“Photo opportunities were created each time the first customer took possession of the first Nissan LEAF in its rollout markets,” the Web site reported. “Top executives smiled as they handed over keys. (Former Tenn.) Gov. Phil Bredesen attended the May 2010 groundbreaking ceremony for Nissan’s EV battery plant. Last year, Transportation Secretary Ray LaHood toured the battery plant as it was under construction.”

Also, Nissan/Renault CEO Carlos Ghosn (pictured) – until recently – was an undaunted cheerleader for the Leaf’s prospects. Last year he said Renault-Nissan would invest 4 billion euros ($5.57 billion) in electric vehicle technology, and Ghosn predicted sales of 1.5 million EVs globally by 2016.

“By the end of last month we had sold 15,000 Nissan Leaf,” Ghosn told Reuters in October 2011. “It is already the most sold electric car in history.”

That’s not saying much, nor was his forecast at the time that he expected 2012 sales to surpass 2011’s. A little later, in January, he said this year’s sales of the Leaf in the U.S. would increase twofold over last year’s. That very low sales bar was 9,674.

“I’m almost embarrassed to tell you we can only double,” he told reporters in January at the North American International Auto Show in Detroit.

The shame should be deeply felt by now. Through the end of October this year, Nissan had sold only 6,791 Leafs in the U.S, which Car and Driver calculated is a 16-percent decline from the first 10 months’ sales last year. According to the publication, in many cases, the paltry sales are of purely electric vehicles (those without a gas tank to extend range) don’t concern the auto companies, but instead were created in order for the corporations to conform with government fuel economy standards.

“In many cases this is intentional,” Car and Driver reported, “with automakers building EVs to satisfy regulators and leasing a limited number of loss-making vehicles in California and a handful of other states.”

One such example is the Ford Focus Electric, whose battery alone costs $12,000-$15,000 and whose sales are measly, with only 200-or-so dealers on the West Coast and in the Northeast bothering with it. Ford received a $5.9 billion stimulus loan guarantee to retrofit five of its plants for the production of electric and hybrid vehicles.

“The marketing of the Focus Electric is to people who buy electric vehicles, not to you and me,” said Jim Farley, Ford head of global marketing, to USA Today in April. “We’re focused on the people who buy them.”

Other examples of “compliance cars,” according to Green Car Reports, are the Chevrolet Spark EV, Fiat 500E, Honda Fit EV, and Toyota RAV4 EV.

But conformity was clearly not the stated plan for Nissan and Ghosn. The retrofitted facility in Tennessee was to produce up to 200,000 batteries and 150,000 Leafs per year. The Brazil-born CEO boldly proclaimed that electric vehicles would comprise 10 percent of total auto sales by 2020. He said that if the company could just make more batteries in the U.S. it could sell more Leafs, according to USA Today.

General Motors has had plenty of capability and capacity to produce its gas-extended electric Chevy Volt, but because of poor demand it shut down production at least twice this year. Both GM and Nissan have also slashed leasing prices well below their costs for making the Volt and Leaf, which probably helped spur a minor uptick in moving their respective inventories.

Worse, soon some of the current owners of these electric cars will attempt to sell them. Cars.com recently sold its 2011 Leaf and in a lengthy blog post reported it was “a complex affair.” The Web site said it sold its used Leaf, with only 11,000 miles on it, for $19,000 after starting with an asking price of $27,000. The effective original sticker price after the $7,500 federal tax credit was $28,165. So it lost approximately one-third of its value in one year. Worse, Cars.com said a Nissan dealer paid less than the $19,000 each for two Leafs that had fewer miles.

That places another cloud over the Leaf, and other pure electrics for that matter. The fact that Ghosn and so many luminaries cleared their schedules to be at the 2010 groundbreaking in the Volunteer State, yet couldn’t show up when the new factory actually opened (if, in fact, it has started making batteries and Leafs), only creates more questions and doubts. Another specialty Web site, InsideEVs.com, said a plant representative told them the cancellation was the result of a “failure to coordinate executive schedules.” So we are to believe Ghosn has made this vehicle and its production facility a huge deal that will lead to the mass adoption of electric cars in the U.S., yet couldn’t be there for its debut because of a calendar planning glitch?

PlugInCars.com says Nissan “quietly started” building batteries last month, and that the first U.S.-made Leaf is supposed to be produced near the first of next year. That’s dubious, as is what Nissan actually did with the $1.4 billion that was guaranteed by American taxpayers.

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news.